Bethesda, Interplay Continue Fallout Legal Battle

Interplay will continue to sell older Fallout games and continue work on a Fallout MMO, the game publisher said Thursday in a regulatory filing.

The news comes as Fallout IP owner Bethesda Softworks on Wednesday dismissed an appeal that sought to overturn a U.S. District Court judge's ruling denying a motion by Bethesda to enjoin Interplay from selling the catalog Fallout titles and working on the MMO, also known as Project V13.

Interplay distributes the franchise games Fallout, Fallout 2, Fallout Tactics and Fallout: Brotherhood of Steel, which it owns and has been making available via physical and digital outlets.

However, in an aggressively worded SEC filing, Interplay said that it will continue to pursue counterclaims against Bethesda, which include breach of contract, declaratory judgment and an award for damages, attorneys fees and "other relief."

In a March 1 court filing, Interplay's lawyers claimed that Bethesda purposefully tried dragging out the case in order to exploit Interplay's "negative financial situation." The filing argued why Bethesda should pay Interplay's legal fees: "Bethesda was keenly aware that Interplay could not fund expensive, protracted litigation."

Bethesda filed suit against Interplay in September 2009, accusing Interplay of trademark infringement involving the sale of Fallout games prior to Fallout 3. In the original suit, Bethesda also claimed that the Interplay-developed Fallout MMO did not garner enough funding ($30 million) and failed to ramp up to "full scale" development by an agreed-upon time.

Bethesda had previously argued that due to the alleged breach of contract, Interplay should lose its rights to the MMO, and that the rights should revert back to Bethesda.

In 2007, Bethesda purchased the Fallout franchise from Interplay in full for $5.75 million. Within that purchase agreement was a trademark licensing agreement that allowed Interplay to license back the rights to develop an MMO based on the Fallout series.

[UPDATE: Bethesda's Pete Hines commented to Kotaku that the lawsuit "is still ongoing and has not been resolved. It is a minor procedural thing that took place, not a dropping of the lawsuit."

Hines added: "The bottom line is it's an ongoing legal matter, it's in no way, shape or form done... We're going to let the process play out in the courts, which is what we've said all along, but beyond that I can't give specifics as to procedures. That's not my domain."

In a Friday comment to Gamasutra, Hines added, "Bethesda Softworks voluntarily dismissed its appeal as that related only to a preliminary injunction, not a complete resolution. All claims in Bethesda's complaint against Interplay remain pending in their entirety and will be pursued actively."]

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